RESEARCH & LEARN

VA Loan Costs


Mortgage Newsletter

Check Local Mortgage Rates

Today's Average 4.28%

Calculators

FEATURED CALCULATOR

Loan Program Choices

Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator


TERMINOLOGY

VA loan costs are the expenses associated with accepting a loan that is backed by the U.S. government on behalf of veterans and active duty military personnel. Although VA loan costs are traditionally kept at a minimum, several charges can be associated with this type of loan.

How VA loans work

VA loan costs will only be tacked on to a loan when a mortgage is written by an approved lender and is insured by the federal government. Although some costs can go along with VA loans, a down payment is generally not part of this type of financing.

Who is eligible for VA loans?

VA loans were created by the federal government in the 1940s to help military personnel enjoy the privileges of home ownership. The VA loan costs were established at that time to be quite low and have remained so.

It's even possible to get construction loans with bad credit.

VA loan costs

Although lenders must agree to keep fees low in order to enjoy this type of backing for their loan programs, VA loan costs do exist. Some of the most common charges a veteran might encounter when obtaining this type of loan include:

  • Appraisal fees;
  • Credit report fee;
  • Loan origination fee;
  • Discount points;
  • Title search and insurance fees;
  • Recording fees and taxes;
  • Survey fees.

These loans are written to stop VA loan costs from including some extras that other buyers might encounter. For example, no brokerage fees or commission can be charged to a qualified veteran.




Funding Fee Tables


Purchase And Construction Loans


Note: The funding fee for regular military first time use from 1/1/04
to 9/30/04 is 2.2 percent. This figure drops to 2.15 percent on 10/1/04.

Type of Veteran


Down Payment


First Time Use


Subsequent Use for loans from 1/1/04 to 9/30/2011


Regular Military

None

5% or more (up to 10%)

10% or more


2.15%

1.50%

1.25%


3.3% *

1.50%

1.25%


Reserves/ National Guard  

None

5% or more (up to 10%)

10% or more


2.4%

1.75%

1.5%


3.3% *

1.75%

1.5%


Cash-Out Refinancing Loans

Type of Veteran

Percentage for First Time Use

Percentage for Subsequent Use

Regular Military

2.15%

3.3% *

Reserves/National Guard

2.4%

3.3% *

Other Types of Loans

Type of Loan

Percentage for Either Type of Veteran Whether First Time or Subsequent Use

Interest Rate Reduction Refinancing Loans

.50%

Manufactured Home Loans

1.00%

Loan Assumptions

.50%


* The higher subsequent use fee does not apply to these types of loans if the veterans only prior use of entitlement was for a manufactured home loan.

NOTE: For all VA home loans the funding fee may be paid in cash or it may be included in the loan. Veterans who qualify as 10% disabled or greater as a result of active military service are not required to pay a funding fee. Those who are not exempt from a funding fee may lower their fee by putting money down on their VA home purchase.

In addition reasonable closing costs may be charged by the mortgage company. These costs may not be included in the loan. The following items may be paid by the veteran purchaser the seller or shared. Closing costs may vary among companies and also throughout the nation because of differing local laws and customs.

VA loan costs may include VA appraisal credit report loan origination fee (usually 1 percent of the loan) discount points title search and title insurance recording fees state and/or local transfer taxes if applicable survey.

No commissions brokerage fees or "buyer broker" fees may be charged tothe veteran buyer.